Yee

Consistent with unclaimed property laws nationwide that derive from a uniform act on the subject, California’s Unclaimed Property Law (the UPL; Code Civ. Proc., § 1500 et seq.) 1 is remedial legislation with a dual objective. That dual objective is to end the fortuitous enrichment of holders of unclaimed property and to return such property to its rightful owner or, if that is not possible, to the state (i.e., escheat) for public benefit rather than for private gain. (See 13 Witkin, Summary of Cal. Law (10th ed. 2005) Personal Property, §§ 36-38, pp. 44-46; Goldstein v. PHH Corp. (Md.Ct.Spec.App.1998) 123 Md.Ct.Spec.App. 214, 217-218 [ 717 A.2d 950, 951-952 ] (PHH Corp.).)

At issue in this appeal is section 1571, subdivision (a) (hereafter section 1571(a)), part of the UPL, which states; “The [State] Controller may at reasonable times and upon reasonable notice examine the records of any [entity] if the Controller has reason to believe that the [entity] is a holder [of property] who has failed to report property that should have been reported pursuant to [the UPL].” Pursuant to this section, the trial court here granted a preliminary injunction to plaintiff, the State…

Concurring and Dissenting. — I concur in the majority’s holding that (1) the trial court erred in granting the preliminary injunction because the court did so without a trial on the merits, and (2) the standard of “reason to believe” as set forth in Code of Civil Procedure section 1571, subdivision (a) means specific articulable facts that would justify a belief by a reasonable person, knowledgeable in the field of unclaimed property, that an entity was not reporting property as the Unclaimed Property Law (UPL) requires.

As to the majority’s final holding, that “if the Controller proves, at trial on the merits, the significant facts underlying its preliminary injunction request, the Controller will have met this ‘reason to believe’ standard with respect to examining the records of American National’s in-force policies,” we part company and I dissent. (Maj. opn., ante, at p. 462.)

In my view, once we have determined the trial court has erred and we return the matter to the trial court for an evidentiary hearing on the merits, the appropriate course is to allow the trial court to conduct the necessary hearing with the opportunity for the parties to present relevant evidence and…

DISCUSSION

I. The Trial Court Erred in Granting the Preliminary Injunction

A. Contention In deciding whether to issue a preliminary injunction to a plaintiff, a trial court must weigh two interrelated factors: (1) The plaintiff’s likelihood of success on the merits at trial, and (2) the harm to the plaintiff if the injunction is not issued against the harm to the defendant if it is. (Butt v. State of California (1992) 4 Cal.4th 668, 677-678.) On appeal, we determine whether the trial court’s decision was an abuse of discretion. (Id. at p. 678.)

American National contends the trial court abused its discretion by ignoring the irreparable injury American National would suffer from a preliminary injunction that granted the Controller the ultimate relief the Controller sought in its lawsuit; in short,

3 says American National, the trial court’s decision deprived it of an opportunity to defend itself on the merits. We essentially agree. B. Background Pursuant to a multistate investigation that California joined to determine life insurance industry compliance with state laws on unclaimed property—an investigation that included a look into the procedures the life insurance industry…